summary
Introduced
In Committee
Crossed Over
Passed
Dead
Introduced Session
112th Congress
Bill Summary
Carried Interest Fairness Act of 2012 - Amends the Internal Revenue Code to: (1) set forth a special rule for the inclusion in gross income of partnership interests transferred in connection with the performance of services, (2) treat as ordinary income the net capital gain with respect to an investment services partnership interest except to the extent such gain is attributable to a partner's qualified capital interest, (3) exempt income from investment services partnership interests from treatment as qualifying income of a publicly traded partnership, (4) increase the penalty for underpayments of tax resulting from failure to treat income from an investment services partnership interest as ordinary income, and (5) include income and loss from an investment services partnership interest for purposes of determining net earnings from self-employment and applicable self-employment taxes. Defines "investment services partnership interest" as any interest in a partnership held by a person who provides services to a partnership by: (1) advising the partnership about investing in, purchasing, or selling specified assets; (2) managing, acquiring, or disposing of specified assets; or (3) arranging financing with respect to acquiring specified assets.
AI Summary
This bill, the Carried Interest Fairness Act of 2012, aims to change how certain income earned by individuals who provide investment services to partnerships is taxed. It introduces a new definition for "investment services partnership interest," which applies to individuals who advise on, manage, acquire, dispose of, or arrange financing for specific assets within a partnership. The bill's key provisions include treating most capital gains from these partnership interests as ordinary income, rather than capital gains, which are typically taxed at lower rates. It also clarifies that income from these interests is not considered "qualifying income" for publicly traded partnerships, meaning they may be subject to corporate-level taxes. Furthermore, the bill increases penalties for underpaying taxes due to mischaracterizing this income and ensures that income and losses from these interests are considered for self-employment taxes. The legislation also modifies rules for when partnership interests are transferred in exchange for services, ensuring their fair market value is recognized for tax purposes at the time of transfer.
Committee Categories
Budget and Finance
Sponsors (2)
Last Action
Referred to the House Committee on Ways and Means. (on 02/14/2012)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.congress.gov/bill/112th-congress/house-bill/4016/all-info |
| Bill | http://gpo.gov/fdsys/pkg/BILLS-112hr4016ih/pdf/BILLS-112hr4016ih.pdf.pdf |
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